invest. don't trade. there's always a bull market somewhere. i promise to try to find it for you right here on mmtd mmd. i'm jim cramer, and on tonight? >> timmy, monumental stimulus from the fed. i mean monumental. soaring stocks and the fed story may go on for the end of time. the other major breaking story this evening, you're looking at live pictures of cairo where the protest and violence continues in that region. good evening, everyone. i'm larry kudlow. this is "the kudlow report." on the middle east meltdown story, before we get to the massive fed stimulus, four suspects have apparently been arrested in libya for the deadly attack on the u.s. consulate there. the violence spread today in the u.s. embassy in yemen and egypt also attacked. u.s. warships also closing in on libya. back here, a big massive stock rally as helicopter ben flies in for one of the most major stimulus moves in the history of the central bank.

it's an open ended commitment for nearly 500 billion newly created fed dollars per year in perpituity. an amazing thing. meanwhile, the dow gained more than 200 points on the day on the news. here's one question for the fed. are they going to destroy the dollar and revive consumer commodity inflation and here's a second question for the fed, a tough one. is this a fed gone rogue with massive new pump priming that will manipulate the november election? in other words, folks, politics. first-up, stocks soar on over 200 point gain today. cnbc's own brian shactman joins us now with the rundown. good evening. >> good evening, larry. the rally chock-full of superlatives. you can argue the merits behind it but hard to argue with it. dow higher all three components, had the highest close since december of 2007. we all know what happened in the

interim. i will talk about volume at the nysc, the highest since june. look at bernanke. the impact of the fomc. all you have to see, this is when the announcement came out and when bernanke started talking and spikes levels off at the close but 200 plus points on the dow. financials dominated the dow. bank of america usually trades thr 330 million shares. home depot hit a new high up almost 40% year-to-date and touching on gold. qe-3, six month high for privilege. the 2012 high is 1790, we're only 18 shy of that. back to you. >> sure, they will destroy the value of the dollar. that easy many thanks to brian shactman. not everyone liked it. with the fed pumping nearly 500 billion dollars a year in

perpetuity, don, nearly $500 billion a year in perpetuity, that means forever. do you really think this is a bad move for stocks? >> it's a terrible move for stocks, larry. ben bernanke has joined chief justice john roberts as a bush appointee working for the re-election of barack obama. it's the economy, stupid, it will re-elect barack obama that will throw us off the fiscal cliff and all the fed money won't save us. this is a disaster, mark my words. >> i will mark those words. we will come back to you with much more about your fed gone rogue hypothesis. is anti-american protests spread across the middle east tonight as violent clashes erupted in yemen, iran, morocco and the sudan. you're looking at pictures from outside the u.s. embassy in cairo tonight where protests continue for a third straight day. that's where nbc's richard engle

join us from this evening with the very latest? hello, richard. >> reporter: clashes are continuing here tonight in tahrir square near the u.s. embassy even at this late hour. they were not the only ones today. so far the clashes and protests by people who were infuriated by that obscure internet video that was so anti-islamic, so inflammatory, so far these protests have been relatively small and happened in at least 11 different countries. the biggest one today was in yec them men where several hundred demonstrators climbed up the embassy and climbed up the main gate and managed to get inside and smashed cars and set them on fire and smashed windows. the embassy had been prepared and the embassy staff were moved to a secure location and no one was hurt. this situation has put embassies across the region on high alert.

tomorrow, here in egypt, more demonstrations have been called for but in a positive sign, none of the protests are expected to take place near any embassies. richard engel, nbc news, cairo. >> many thanks to richard, nbc's richard engel. let's get to our very distinguished panel this evening. former deputy secretary of defense and paul wulff wi wolfowitz. and former radio talk show host, john batser. john, i want to know if you have any good new news. the libyan government has apparently caught four people. as you know, yesterday and today, president obama said we are going to bring them to justice. are these the guys that committed the crime that killed the people in the em bass said in the brilliant ambassador, john or are these just guys libya found? what's going on here? >> round up the usual suspect,

larry, i think that's the movie line. my investigation shows ambassador stevens was assassinated in a plot. lured to benghazi, assassinated in that safe house and lured by the organization working with the united states to overturn gadhafi and police libya these last years but opened relationships with al qaeda and the darkest elements of the jihadists. there's suggestion ambassador stevens was murdered in revenge for the death of a libyan hero to the al qaeda forces al-libbi killed by a drone strike june 4th. >> john, what you're saying is round up the usual suspect, you're saying they have not really caught the perpetrators who killed ambassador stevens? >> the perpetrators are al qaeda and the jihadists of the uma. it's a vast organization. >> thank you for that. let me go to paul wulff wits, former deputy secretary of

defense. thank you for coming back on the program. what's your take on this? president obama said no act of terror will go unpunished. he said we're going to bring them all to justice. what happens now? how do we bring them all to justice? >> clearly, we're talking about libya, it will happen with the cooperation of the libyans. one of the important things to put in context here, it's almost lost in everything i've heard is back in july the libyans had a pretty fair election the first in almost in their history. the muslim brotherhood came in a distant second and the jihadists barely made it to the national assembly. i think to some extent what we've seen in the last three or four weeks, not only in the attack on the consulate in benghazi but mosques they consider insufficiently extreme is attempt to use their guns to substitute for their defeat at the polls. i think it's really critical not only for the united states but

also for the people of libya. i think we do have, in the case of the libyan, allies. the problem is that the government doesn't control the security forces. >> do you think secretary wolfowi wolfowitz, do you think that the president and the current chief of staff and so forth, will they put troops on the ground, delta forces, black ops? how are we going to do this? >> i think it depends what the libyans are prepared to do with us. obviously, not going to conduct a criminal investigation in that country on our own. but they have every reason to get to the bottom of this. it was not -- this wasn't a demonstration. i don't know whether they specifically thought they could kill ambassador stevens, who was by the way, a wonderful man, a wonderful ambassador. it's a huge loss for the united states and for libya, to have lost this man who was doing so much good. but it was not a demonstration. this was a military attack and the organization that did it has to be found. >> okay. let's go to nick burns.

a lot of people believe, however, despite the tragedy in libya, a lott of people believ egypt is a lot more important than libya in the short run, long run, whatever. i want to ask you about some astonishing quotes from president obama. he said today, i don't think we would consider egypt an ally but we don't consider them an enemy. what does that mean? yesterday, he said they weren't an ally. today, he said they're not an a ally but not our enemy. by the way, we're about to forgive $1 billion in debt to them. what is president obama talking about here? >> first of all, i want to associate myself with remarks of paul wulff wits. i think paul is exactly right, what we're seeing this week in yemen and libya and certainly egypt are the extremist forces who could not succeed at the ballot box now trying to defeat the more moderate elements through violence. there's a lot of worry that that attack in benghazi did involve

terrorist elements. we have a big problem on our hand. i think, larry as well, we have to focus first on reinforcing embassy security and convince ing democratically elected leaders in the arab world to stand up to these forces and have to work on the president of egypt. president morsi has not denounced the protests and violation of our embassy in then kind of terms we would want him to. i can only gather what president obama meant was ally is a specific term. treaty ally. japan, south korean countries. egypt is a friend to the united states and we have a working relationship with the new egyptian government but we have a lot of differences, too. we've seen that in the way that government has reacted to the attacks on our own em bassty. >> the guy basically hasn't apologized for anything. who knows what he's doing in the background. he may be supporting this. i think those are really important points, nick burns. back to john. what does this do in two ways,

number one, israeli relations? this is also part of this middle east problem. obama won't see netanyahu when netanyahu comes to the united nations. i want to complicate the question deliberately. what do these uprisings have to do with syria and iran? on the table, israel and the u.s. on one side and syria and iran on the other. who are the winners and who are the losers? >> our enemies are cunning, larry. they can see the divide between washington and jerusalem and they're taking advantage of it. that's what the demonstrations will be over these next 24 hours after friday prayers. with regard iran and syria, everything that distracts the focus on syria is an advantage to iran. iran's hand, i'm told, is in every one of these cities. the demonstrations insana for example don't need coordination. there are a lot of iranian dissidents there that can rally forces. what we can see is the enemy

making huge advances to overcome any success these last years in the arab capitals or in tehran for democracy. this is a vast advance, larry, this is not minor, this is not local. >> let me just go. paul wulff wi fwulff wits, is t east melting down? is the arab spring that looked so rosy to everybody turning to a dark arab winter. >> if people thought it was rosy, they were premature to call it a spring and premature to call it a winter. the arab world is in enormous upheaval and it is partly due to decades of stagnation and lack of movement. there are huge problems there. what is really needed is not for the united states to announce we're ending the war here and ending the war there and staying out of syria and leaving qatar and other small countries in the persian gulf to play the leading

role in that region. people who want to stand up to these extremists need to know that the united states will support them. when the president of the united states has a chance to say something about the president of egypt, he shouldn't say wishy washy, neither ally nor enemy. he should say very clearly this man hasn't done the right thing with respect to this attack on the embassy and we will look to see how he behaves and his government behaves and there are consequences. we still are a powerful country. >> of course. let me apply the paul wolfowitz principle behind israel? are we standing behind israel and netanyahu who wants a red line of support, hillary clinton won't give him one. how do you read it, nick? >> i think the united states over the course of the last two administrations has been a good friend of israel and particularly the last couple of years, the obama administration has given a lot of military and intelligence support to israel following in the tradition of george w. bush.

i don't see a problem there. what bothers me is see a public argument between israel and the united states. you never want to see that and put it in private and have a united front in public. i would hope israelis would trust the united states we will block iran and deal with the iran question on our terms and a time of our koosing. i don't think it's smart with the israelis or prime minister to think he should attack soon. i do think there's an increasing realization within israel they're better off working with the united states on this question and not going it alone. >> thank you. thank you very much. former undersecretary of state nick burns and former secretary of state paul wolfowitz and abc broadcaster, john bachelor, thanks to all of you. coming up, new fed firepower sends stocks soaring, the biggest finish since 2007. and is the fed carrying

obama's water? has it gone rogue? is it election year manipulation and just plain old election politi politics? free market capitalism the best path to prosperity. i wish we had a whole lot more on the middle east but not much at the moment. [ male announcer ] the 2013 smart comes with 8 airbags, a crash management system and the world's only tridion safety cell which can withstand over three and a half tons. small in size. big on safety. we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more

so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's another reason more investors are saying... [ all ] i'm with scottrade. [ male announcer ] the exceedingly nimble, ridiculously agile, tight turning, fun to drive 2013 smart. ♪

markets surging to multi-year highs as fed ben bernanke with the stimulus. king dollar stumbled half a percent. first time king dollar is below 80 since last may and that ain't going to be the bottom either. let's talk. back again, don, chief investment officer at trend macro. i know you think the fed went politic politically rogue. i don't disagree with you. we will talk about that with a couple house members. what i want to ask you is this, i can hardly keep a straight face. >> i can only imagine what they're going to say. >> if the u.s. central bank is putting in 40 billion new dollars every month, maybe forever if you read bernanke's

statement or couple of years, what does that mean for the stock market? there's an old axiom that says don't fight the fed. >> larry, if they were putting $40 billion a month into the stock market, we could have a conversation. what are they doing? putting it into the mortgage market. just before the show i did a quick survey of the 307 million people in the united states. i was able to find 42 of them only who were not buying a house because mortgage rates were too high. this ain't going to work, man. stimulus doesn't work. doesn't work when congress does it or the president does it or when the fed does it. the most the central bank can do too help the economy to loosen when it previously made the mistake of being too tight. the fed is not too tight now, folks. loosening i looseninging further won't help. >> let's assume there's arbitrage in the mortgage market and stock market. the dollar, the exchange rate market, how long will it take for the dollar before it

collapses and for gold to go, i don't know, $2,000, $2200, whatever you think? >> larry, it really depends truly how long the $40 billion a month goes on. if it goes on forever, the sky is the limit, at least for gold. gold could go to $10,000 at the same time as the s&p goes to 100. believe me, if the fed is still doing $40 billion a month two years from now, that's not a good thing because it wouldn't do it unless the economy were still in the gutter. so this is a trade-off. they only do the good thing when there's a bad thing. so if you are wishing for them to do the good thing, that means you're wishing for the bad thing. that's why this doesn't work and why this isn't going to help stocks. >> that's an interesting point and i want to go back to that, why it won't help stocks. i don't know what the short run is anymore, five days or five month or five years whatever. if bernanke is putting all this money in, every month, he's putting all this money in, everybody knows he's putting all this money in, when does the dow

go to 15,000, 16,000, 17,000. at some point the whole bulb will collapse, totally collapse, maybe about the time the whole currency collapses. before it collapses, what i'm trying to get to, don, how high could the market go? >> the market, in my view, can only go as high as this fed maneuver can get it to go, maybe for about a month. you have about a month for this thing to work. the reason i say that, when the stock market soars, it will increase confidence in the economy. every election is the economy stupid. so ben bernanke may have inadvertently or purposely just re-elected barack obama. now, if that happens, then barack obama will be the most dangerous creature in the world. he will be a lame duck president who thinks he's got a mandate. he will have beaten the great paul ryan, the best mind of this generation in the republican party and obama will have won. do you think obama's going to compromise on the fiscal cliff.

no. we're going to have tax increases that will affect every american who pays taxes. the republicans will retaliate by not raising the debt ceiling and we have a treasury fall on top of it. stocks won't like that. >> it's the exact opposite of supplied side economics. higher tax rates and easier money when the other idea was lower tax rates and tighter money and strong dollar. this is all wrong, i know it's wrong. >> we're checking every box on how many things can we do wrong list? >> i'm trying to find out how long the good news in the stock market lasts. i have to ask that question. >> i give it about 45 seconds, larry. >> you're coming on the radio this weekend. i will ask you this question all over again. >> my pleasure. up next, fed gone rogue? it appears mr. bernanke will keep printing money until the cows come home. house members kevin brady and brad sherman will face off on all of this.

>> they agreed to increase the policy of accommodation by purchasing additional agency backed mortgage securities. >> 90% probability of this happening. >> the markets are move, traders are reacting. >> the idea is quicken the recovery and help the economy begin to grow quick enough to generate new jobs. >> does that mean your intolerance for inflation will be higher in coming years. >> a gain of 200 points for the dow industrial average. we're at five yearing ing mhig. up. a short word that's a tall order.

up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands and never ever have to fill up gas in the city. i very rarely put gas in my chevy volt. last time i was at a gas station was about...i would say... two months ago. the last time i went to the gas station must have been about three months ago. i go to the gas station such a small amount that i forget how to put gas in my car. ♪

what bernanke is doing is what the president is saying is wrong, the president is saying there's more progress going on, bernanke is saying, no. i would like to appoint someone i selected and look for someone other than the current incumbent. >> wow. that was governor romney today talking about the fed head bernanke.

i want to make an editorial, romney has this whole story right what he just said. the economy is not coming back. the fed is not the culprit. they should not be doing what they're doing. let's look at the fed. this is the balance sheet of the fed. just think of it as this. you see this over here. these are trillions of dollars, okay. that's how much the fed has put into the economy. of course, down here is your timeline, 2008-09-10-11-12. looky looky. this is the first qe at the end of 2008. i think actually, i will argue he did the right thing that time. here's the second qe, which came in 2010 and ended in the middle of 2011. i think that was a big mistake. it did more harm to the economy. you know why? the dollar collapsed, commodity prices including food and gasoline and energy went sky high and stopped consumer spending and everybody blew out. the fed stayed away from it for

quite a while and now they're going back to old habits right there. there is a 3 trillion doll dollar -- let me put this right here. this is a $3 trillion fed balance sheet, okay? it used to be about $800 billion. $3 trillion from $800 billion. you just think about that, folks. this is real money that the fed prints. you know what, if they keep putting in nearly $500 billion a year, that means every couple of years they put in another trillion, they go to 4 trillion and then 5 trillion. at the end of the day, when the fed goes bankrupt, you, the taxpayers are going to be behind it. they may go on for years. that's what bernanke basically said today. i think it's completely nuts. i've never seen anything like it. i started my career at the new york fed in the early 1970s and i've been a fed watcher ever since. anyway, for nearly four years the fed pump priming has failed

to ignite the worst recovery in modern times going back to 1947. let me just go back again. all this stuff, all this stuff from 8$800 billion to a trillio, all that stimulus, god knows how high it's going to be after that, has failed to ignite a recovery, which is the worst in modern times, roughly 2%, going all the way back to 1947. so, if it was going to work, why hasn't it worked? let me ask, is that the right question, kevin brady, vice-chairman of the economic committee from texas? if it was going to work, why the hell hasn't it worked already? >> it's not going to work and i think most economists agree with what you just said. one, this is really a stinging rebuke of president obama's failure to lead in this economy. here we are more than three years after the session ended and the fed still feels obliged to try to stimulate the economy. lower interest rates are at a 50

year low already. the fed may well have said it should be extended to 3015 for all it matters in the market. there's plenty of liquidity, both capital bank, excess reserves at ned. the money businesses want to invest because of uncertainty can't invest. this is not going to get the economy going. finally, i really am worried about both the short term uncertainty and the long term price inflationary spiral this helps increase. >> there is no limits to the fed money creating power. i want to ask my friend standing to your right, brad sherman, democratic house member from california. now, brad, why is the fed doing this purposely? why are they doing this purposely to manipulate the election for barack obama? isn't that what's really going on, brad sherman? the fed is putting money in to help the re-election of obama or am i too cynical? >> you're way too cynical. remember, bernanke was originally a republican nominee. i don't think he's become part

of the democratic party. second, i don't think we should be focusing on the politics and trying to score political points. the question is what can we do to get this economy going again. if you want to say, well, the economy is bad, so everything that america's ever done must have been bad, i think that's absu absurd. the fact is our country is good. many of the things we've done are good. this is something that can move us in the right direction. >> brad, i think the country is great. you know i like to be an optimist. i think we are hurting the country by making all these wacko policies. what we should be doing, what we should be doing right now, kevin brady. we should be lowering tax rates, extending the bush tax cuts to remove all that business and investor uncertainty and being rolling back regulations and be able to let the economy breathe some more. money is not the problem. how can money be the problem

when there's 3 trilli$3 trillio outstanding? >> can a democrat get a word in here edge-wise? you're pontificating for the republicans. he is. >> larry kudlow has taken me to the woodshed plenty of times. i think you've been very fair. you're on mark here. the real roadblock, obsession with higher taxes coming from unfortunately the white house and congress, the health care and the president's new law and all the red tape, the fiscal red tape, those are the roadblocks, the 18-wheelers jackknifed against this economy. until we remove them we won't see the growth we deserve. >> i must give brad sherman the last word and i do so willingly and gratefully. go ahead, brad. >> this isn't the time to beat up on democrats. this isn't the time to dust off all the anti-obama talking points. the question is in a bad economy, is this a step forward? the critics of this program will

still say it will reduce our unemployment rate by a quarter point or better. it will increase our economic growth rate by a quarter point or better. that's hundreds of thousands of people who can come home from a day's work and say, i'm able to support my family. and when did that become a bad thing because -- because somebody could score some political points. >> can i just -- >> gains over two years or more, again, a drop in the bucket. we have 24 million americans who can't find a job. snow all i want to say, you've both been great. i want to say this. at the jackson hole conference, bernanke said the fed has helped create 2 million new jobs after they put in $2 trillion in the economy. so that comes to what, do the math. $2 trillion into the economy to create 2 million jobs. that's a mil ylion dollar per j, not a very good cost benefit ratio if it ever worked at all

which it doesn't. many thanks to house members brad sherman and kevin brady. a million dollar a job from the fed. nice going. . >> up next, the chicago board of education will tell us why rahm emanuel, aka rambo is caving in to the teacher's union. it's a sad tale and you won't want to miss it. if we want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students.

let's solve this. flo: every driver is different. we've got great news for them all. you can try snapshot from progressive before you switch your insurance. [ horn honks ] just plug snapshot into your car, and drive like you -- to see if your good driving could save you up to 30%. so try the way to save that's as unique as you are. now you can test-drive snapshot before you switch.

visit progressive.com today.

in day four of the chicago teacher's union strike, it looks like mayor rambo emanuel isn't as tough as rambo. looks like he's caving in to the teacher's performance. and with us private equity in chicago. welcome back to the show. let me start with this. since the kay day of the show, 15% of fourth graders can read, do you think rahm emanuel will cave in on teacher performance like as in reading performance because that in some sense is the most important issue there. >> i agree with you, larry. the answer is the union is brutally tough, willing to hold the kids hostage.

i don't know where this strike negotiations comes out. i'm worried. >> where do you think rahm emanuel will give in? >> i don't know, larry. i'm not on the inside of the negotiations. i tell you, the union has given every indication they will hold the kids hostage as long as it takes for their side to win. they are brutally tough. i don't know how that students will fair in the end result. >> you're on the board of education, is that right? >> i'm on many of the boards for reform movement in chicago, about a half-dozen of leading organization, philanthropist and reform efforts in the city. >> you're here in the buzz. how close are they to making a deal? i'm saying that rahm emanuel is not really a rambo guy because he's giving in. that was the information we received. is that not true or is this strike going to go on for a while? >> it's a good question. i don't think anybody knows for sure, frankly, larry. the feedback, the rumors i'm getting are that they're getting close to a deal and it's

probably not the best deal for students. we'll see. >> i think the only thi thing -- they're bankrupting the till. chicago is going to go bankrupt if they don't stop these pensions and benefits. the one, bruce, that really bothers me is the public schoolteacher performance. when i see fourth graders only 15% of the fourth graders can read, first of all, my heart bleeds and second of all, it is just a tragic thing that needs to be changed. teacher performance and evaluation. otherwise, go to charter schools, otherwise, go to the parochial schools and the teacher's union has blocked charter schools and blocked school choice and that's even worse. >> larry, you are so right. the union has battled efforts to improve schools and reform schools for decades. they are so tough. it's a heck of a long term war. we have to win it for the students and inform and empower parents and give them choices and options. the union doesn't care about

students. that's not what they're about. about power for themselves and protecting incompetent weak teachers that hurts the students and good teachers in the system. >> thanks for coming on. good luck to you on your quest, a worthwhile one. coming up on kudlow, nanny bloomberg strikes again. new york city health bans supersize sugary drinks. is this government gone wild? mayor bloomberg, he loves this stuff. later, will the middle east madness be a game changer for the november election. this is an interesting thing. mitt romney is dead even with obama. will his new focus on defense pay off for romney? we will see with our panel. stay with us. i'm larry kudlow. at usaa, we believe honor is not exclusive to the military, and commitment is not limited to one's military oath. the same set of values that drive our nation's military are the ones we used to build usaa bank.

with our award winning apps that allow you to transfer funds, pay bills or manage your finances anywhere, anytime. so that wherever your duty takes you, usaa bank goes with you. visit us online to learn what makes our bank so different. every time a local business opens its doors, or makes another sale, or hires another employee, it's not just good for business. it's good for the entire community. at bank of america, we know the impact that local businesses have on communities. that's why we've extended over $4 billion in new credit to local businesses across the country so far this year. because the more we help them, the more we can help make communities stronger.

welcome back to the "kudlow report." nanny michael bloomberg. that's what it is, nanny michael bloomberg strikes again in new york city, he just made new york city the first to strike down supersized drinks. >> this is the first step of a

city to curb obesity and certainly not the last step and we believe it will help save lives. >> is this a necessary measure to fight obesity or is this government gone way too far? let's ask our guests, jeff, senior fellow with the national center for public policy research. last time you were here, bloomberg banned kosher food for homeless people. >> all- >> wait. except if you go to 7-eleven? >> you can't get them at convenience stores -- it's not just the government gone wild, it's for soda taxes, bans on smoking in outdoor places, bans on e cigarettes that help people stop smoking. the nanny state has been co-opted by big government activists. this is actually bad for public

health. >> who is this nanny state polit bureau? this one was going to win because it had all mayor bloomberg's appointees on it. >> dr. farley. >> czar bloomberg. >> mayor bloomberg's health xhirgt, original health commissioner is running the centers for disease control, dr. tom friedman. the whole government is trying to demonize efforts- >> do we have any free choice? any personal liberty free choice when it comes to our food. >> if this was justified, if this move made sense, you may as well ban large hamburgers, large french fry, no science behind it, no justification, more about the government taking more control over our lives, won't curb obesity. >> regarding obesity, someone once told me if you eat less and take nice long walks --

>> where are you getting that from? >> you might lose 10 or 15 pounds. what about that idea? you can do it on your own without the polit bureau czars looking over your shoulder. >> it's been co-opted for government types that think deposit has to solve our problems. you're right, personal responsibility, personal freedom of choice. free markets should come help problems. >> free markets. that is it, jeff, you have just said the war. up next on kudlow, more protests break out across the middle east, hundreds chanting death to america. could that change the course at home. could it end up being obama's jimmy carter moment? we have political pros who will square off next. we're sitting on a bunch of shale gas.

there's natural gas under my town. it's a game changer. ♪ it means cleaner, cheaper american-made energy. but we've got to be careful how we get it. design the wells to be safe. thousands of jobs. use the most advanced technology to protect our water.

billions in the economy. at chevron, if we can't do it right, we won't do it at all. we've got to think long term. we've got to think long term. ♪

some breaking news. at the capital within the hour, the house passed the cr continuing resolution, a bill that funds the government through the end of march. big bipartisan vote on this one, 321-91. no surprise. speaker boehner put out statement it's time for obama and the senate democrats to work with republicans to stop the tax hikes that threaten our economy. it's an excellent idea but it ain't going to happen any time soon. in other news, new presidential campaign polling today in three key state, ohio, florida and virginia, all shows president obama has a lead among likely voters. cnbc's own john harwood has the

details, good evening, john. >> ever since both party conventions we've been focused on president obama's bounce in national polls. now we have swing say it numbers from the nbc "wall street journal" maris poll and they're good for president obama. he's taken a clear lead in three important battle grounds. first, the state of florida with 29 electoral votes, president obama leads romney 49-44%. ohio with 18 electoral votes, president obama leads by even more, 50-43% for mitt romney. in the state of virginia, president obama leads 49% to 44%, again over mitt romney. now, all three of these are states that were carried by president obama in 2008. mitt romney needs to take at least two of them away. maris pollster concluded this way. he said this election is now about mobilization rather than persuasion because so many voters are locked in and also, you'd rather be in president obama's shoes than mitt romney's at this point in these three

critical states. back to you. >> many thanks to john harwood in the update of the maris poll. remember, i need to go to the website real clear politics and get average of all the polls and you will see it's still a very close race. our question could the middle east be a game changer for the presidential election. the middle east. remember jimmy carter and iran hostage crisis. that's one of the things that cost carter the election. from the center of american progress, reason.com editor-in-chief, and jonathan kalegio, sorry, of american crossroads. jonathan, i want to start with you because mr. obama said rightfully and i think americans support him, regarding these thugs that killed our ambassador to libya, we're going to bring them to justice. it turns out the guys that were brought in by the libyan government today were not the thugs. i want to ask you, having made this pledge, if president obama cannot bring in and bring to

justice the people that killed our ambassador, what's going to happen? what happens to his credibility? >> i think you're exactly right. he's given mitt romney an opportunity to make the case obama has been asleep at the wheel or not paying as much attention to issues of national gua guard -- national security he could have. we found out he doesn't attend the majority of intelligence briefings and found out early in the week he snubbed president netanyahu from israel when he tried to get a meeting over anywhere security in iran and he snubbed him over that. we're also finding out that just yesterday when all this happened at the embassy, he went to a campaign event after that. i can't imagine president bush going to campaign event after an ambassador was brutally murdered in an arab country. i think romney really has a case he can make that obama's been asleep at the switch here and we'll see whether he can do that in the next couple of days. >> let me go to my libertarian friend. you've had experience. you're not really for obama but

not really for romney. i appreciate that very much. i want to ask you how you see this whole middle eastern story and the president's election. am i making too much of this or is it going to work? >> first, i want to correct you. i am actively opposed to both obama and romney, they're terrible. obama has had a terrible foreign policy. there is no guiding principle, no dismaking matrix from which you can guess why we were leading from behind in libya. we were holding on to mubarak until we knew he was going to go in egypt. he is a terrible foreign policy guy. mitt romney is an echo. pro-choice. he wants to spend more on defense than obama is committed to. we don't know why and don't know to what end. i think obama will come out. 58% of americans in a rasmussen poll says americans should be getting out of the middle east. they're tired of it.

if mitt romney is merely saying obama is terrible there, people will agree with him. okay, what's your plan? we don't know what he's doing on the economy and foreign policy. >> let me go to igar and give you a chance to respond. you are old enough to remember jimmy carter. things in iran didn't work out so great for jimmy carter. look, i think president obama is actually saying some good things. he's trying to get tough on these terrorists. i think he understands they're linked to al qaeda. i think so. i think he put himself at risk when he said we're going to bring these thugs to justice. my question to you is what happens if we don't? what happens if we don't catch them. let's look at 1980. how did reagan handle the botched iran hostage situation in 1980 during that campaign? he said, let's unite the country, let's come together as one america. george h.w. said the same thing. romney took a very different route. he asked what's going to help

romney and took shots at the president. so i think, it seems to me, that if four years ago, the republicans ran on the slogan country first, yesterday romney decided he's going to run the slogan romney first. what's really despicable here is that in his statement, he said that obama sympathized, sympathized with the people who killed an american ambassador. if that's not disgusting. the lowest -- >> i don't think that's what he said. >> i don't know what it is. you know what, no republicans backed him up. they all walked away with it. >> you don't agree with that. that's not what romney was saying. >> it's in his statement. obama sympathized. >> let jonathan react. romney was just -- >> come on, larry. he doubled down on it this afternoon. >> hang on a second for christ sakes, i want to get another statement out of this. my impression from romney is the embassy put out a wrong press release which the white house didn't even agree with and the

state department didn't agree with. that doesn't make romney a bad guy. romney actually was in sympathy with the administration. that's what i'm asking knew he was in front of the administration. the administration fort lauderdale romney's lead how atrocious this statement was. >> and the violence -- >> and they didn't do any action on the diplomat that did that in egypt. if you have one person making serious national policy through a twitter account and there's no repercussions for that person, that is not leadership coming out of the white house. that is very very passive. it was absolutely appropriate for romney to come down hard on that. >> nick, do you want us to get out of all these place, get out? is that your point? >> that would be a start. not to have been there in the first place. but you can't rewrite history. we're inheriting a situation. what is our egyptian policy? what are we supposed to be doing there on a day-to-day basis? in libya, i don't think we should have been in libya in the first place, a blatantly

unconstitutional act of war obama led us into. he's worse than bush on this which is inconceivable. i get no sense what is the next step obama does other than apologizing for hurt feelings in the muslim world for a movie made by people who have nothing to do with the united states government. i don't know what romney is going to do. is he going to bomb iran now because that would get us out of the situation. >> igor, one thing romney might do is not destroy the defense budget, which is what president obama is doing. >> you're wrong. you're wrong, larry. >> you're wrong. the -- you're talking about the budget control act that cuts that ryan also voted for. we have to try to figure out how to deal with that -- >> 900 billion before, igor. that's a trillion dollars. >> you talk about the foreign policy of obama. i wonder where romney is on this whole thing. what would he have done differently? he hasn't laid it out. he uses catch phrases, peace

through strength. there are no other details. i was very surprised. he had an event in virginia, i believe, today, mentioned the unrest in the middle east, maybe in a two second sound bite and moved on. >> my apologies for the american politics. >> no apologies. >> i appreciate it very much. sorry, i ran out of time. that's it for tonight's show. thanks for watching. go fed, man. 500 billion dollars a year, wow! my volt is the best vehicle i've ever driven. i bought the car because of its efficiency. i bought the car because i could eliminate gas from my budget. i don't spend money on gasoline. it's been 4,000 miles since my last trip to the gas station. it's pretty great. i get a bunch of kids waving at me... giving me the thumbs up.

it's always a gratifying experience. it makes me feel good about my car. i absolutely love my chevy volt. ♪ i absolutely love my chevy volt. when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this.